Battle brewing over EU budget

Thursday, November 01, 2012 - 02:19

Debate is heating up over the EU budget - Britain's PM has suffered a defeat in parliament over the issue and France and Denmark are threatening to use their veto. Given the tough economic climate in Europe, it may be harder than usual to gather a consensus from the 27 EU member states on long-term 1 trillion euro spending plan. Joanna Partridge reports

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Austerity measures will damage your health.
That's why Greek doctors and nurses took to the streets to protest the government's cuts and new budget.
The EU's budget plans are also causing concern
Britain is the latest member to sound the alarm over the bloc's 1 trillion euro spending plan.
UPSOUND
Prime Minister David Cameron suffered a humiliating defeat in parliament over his preference for allowing the EU's spending to rise in line with inflation from 2014 to 2020.
Members of his own party and the opposition want a cut to reflect the bleak economic outlook.
Finance Minister George Osborne now says Britain will veto any deal which isn't good for its taxpayers.
SOUNDBITE: George Osborne, British Finance Minister, saying (English):
"Everyone wants to see a reduction in the EU budget. The negotiations have just started, there are 26 other countries. But let's be clear, we are not going to accept a deal that is not good for Britain."
Meeting the Irish Prime Minister in Berlin, German Chancellor Angela Merkel said she wasn't surprised by pre-budget disputes
SOUNDBITE: German Chancellor, Angela Merkel, saying (English):
"It is normal that positions are defined before the negotiations. There's no question about this. I will hold direct talks with David Cameron next week. We are in close contact with the UK."
But the UK is not the only critic.
Denmark and now France have also raised objections.
As the biggest recipient of farm subsidies, Paris is opposed to any reduction in them, putting them on a collision course with Germany.
Dan Morris from JP Morgan says he's not surprised by the lack of consensus.
SOUNDBITE: Dan Morris, Global Strategist, JP Morgan, saying (English):
"Certainly more difficult than in the past just because we have all the tensions around the crisis, around questions about what Europe really should be, what should it become, what are the implications for say a banking union within the euro zone. So possibly more contentious negotiations than in the past, but I think ultimately we will come to a resolution because ultimately they do have to for the institutions to keep functioning and fundamentally at an institutional, at a political level I think you still have the commitment to Europe."
Many Britons are eurosceptics and regard the EU as incompetent and spendthrift.
But other cash-strapped nations may also try to limit their EU contributions - setting the scene for some heated debate when the leaders try to resolve their differences at a summit later this month.

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